Nigeria’s Reserves Bleeding Despite Huge Oil Windfall – Atiku Raises Alarm

Former Vice President Atiku Abubakar has spotlighted a glaring contradiction in Nigeria’s economic management: foreign reserves are falling even as the country reaps billions from elevated crude oil prices caused by Middle East tensions.

Atiku, through his spokesperson Phrank Shaibu, described the situation as unsustainable and demanded urgent accountability from the Bola Tinubu administration. Central Bank of Nigeria figures released on April 29, 2026, placed external reserves at $48.37 billion, down despite an estimated N5 trillion oil windfall accumulated in recent months.

The decline occurs against the backdrop of Brent crude climbing to between $101 and $108 per barrel in recent weeks, up from below $70 in early February 2026. Nigeria, as Africa’s largest oil producer, typically earns the bulk of its foreign exchange from petroleum exports, making such price surges historically significant opportunities for reserve build-up and economic buffers.

Yet the opposite is happening. Successive administrations have often channelled windfalls into recurrent spending or short-term interventions rather than long-term structural fixes. Under President Tinubu, who assumed office in May 2023, the government removed the long-standing fuel subsidy and unified the foreign exchange market. These bold reforms aimed to correct deep fiscal distortions but triggered sharp naira depreciation, soaring inflation above 30 percent, and widespread hardship, particularly in food prices and transportation costs.

Atiku argued that depleting reserves to defend the naira without addressing underlying weaknesses amounts to “pouring water into a basket.” He warned against using the fresh revenues for recurrent expenditure or political patronage, instead calling for targeted relief measures to cushion fuel price effects, stabilise food supply chains, and support vulnerable citizens.

Nigeria’s external reserves serve multiple critical roles: backing imports, servicing external debt, and anchoring investor confidence in the naira. Their continued erosion raises questions about the sustainability of current exchange rate policies and the country’s ability to weather future shocks. With oil still accounting for over 80 percent of export earnings and a large chunk of government revenue, volatility in global prices remains a persistent risk that prudent management could mitigate.

The development highlights the recurring challenge in Nigeria’s political economy. Past oil booms in the 1970s and early 2000s delivered limited lasting benefits due to weak institutions, leakages, and policy inconsistency. Atiku’s intervention underscores the tension between immediate fiscal pressures and the need for disciplined investment in domestic refining, critical infrastructure, and non-oil sectors. Boosting local production and exports could reduce import dependence and create genuine naira demand, moving beyond reliance on reserve sales by the Central Bank.

This oil windfall represents a crucial test of fiscal governance. How the revenues are deployed will influence not only near-term macroeconomic stability but also the government’s capacity to deliver tangible relief and lay foundations for diversified growth. Effective utilisation could ease cost-of-living pressures and restore some public trust, while mismanagement risks deepening economic fragility.

Nigeria cannot afford to treat its external reserves as a political war chest at a time when structural reforms demand both courage and prudence.